VW, Porsche, Qatar: Menage Trois Complete, May Be Number One This Year

Bertel Schmitt
by Bertel Schmitt
On Friday, the last act of the ménage à trois between Volkswagen, Porsche and the Sheik of Qatar was consumated. After the supervisory boards of Porsche and Volkswagen had given their approving nods to Porsche becoming the tenth brand of Volkswagen, Sheik Hamad bin Dschassim bin Dschaber al-Thani signed on the dotted line and bought 10 percent of coveted voting shares in Porsche SE for his sovereign wealth fund Qatar Holding LLC. Qatar will also take over “most” (says Das Autohaus) of the options on VW stock. They paid €1b for a package of derivatives that gives Qatar access to a 17 percent stake in Volkswagen. As peace breaks out between Wolfsburg and Zuffenhausen, Volkswagen is set to attack a big enemy: Toyota.When the amalgamation is finished in 2011, ownership in the new Volkswagen/Porsche conglomerate (which may be renamed to Auto Union AG) will be as follows:– Piech and Porsche families: 35 to 40 percent.– Lower Saxony: 20 percent– Qatar: 17 percent– Remainder: Widely held (or T.B.A.)After years of infighting; everybody wins:The Porsche/Piech families control the world’s second largest auto maker.Lower Saxony keeps its largest employer in Lower Saxony and can veto any decision.Qatar has bragging rights amongst fellow sheiks: They own a share of their favorite toymaker Porsche, and a good chunk of the currently most successful automaker on the planet.Wendelin Wiedeking walks away with a golden parachute of €50m. €25m of that will be (in a tax advantageous way) donated to a charitable trust, and, as a nod to the cabal that kept Wendy’s popularity high, €1.5m will be donated to organizations that support retired and impoverished journalists.The new Volkswagen/Porsche conglomerate has the right stuff to become the world’s largest automaker, said Volkswagen CEO Martin Winterkorn after announcing the successful consummation of the three-way nuptials. Lower Saxony’s premier Christian Wulff, who sits on the VW supervisory board and had a deft hand in Piech’s victory over upstart Wiedeking, sets the same goal. “It is our clear target to become the number one in the worldwide auto business,” Wulff declared to Germany’s Handelsblatt.A bad case of hyperbola? According to OICA, the world’s official scorekeeper of auto production, Toyota had made 9.2m units in 2008, VW only 6.4.This was 2008, this is now. In June 2009, ToMoCo’s year-to-date worldwide production was down 40.6 percent, whereas Volkswagen’s deliveries were down by only 5 percent. Volkswagen had little to lose in the USA, but is strong in the surging German, Chinese and Brazilian car markets. “Surpassing Toyota in terms of net profit and global production in 2009 suddenly looks like a strong possibility,” wrote Automotive News after looking at the astonishing numbers.Don’t judge VW by their skinny cover(age) of the USA. If current trends continue, Volkswagen may very well rule the world by the end of this year. As of June 2009, Volkswagen had already surpassed Toyota: Volkswagen’s year-to-date deliveries in June were 3.1m, whereas ToMoCo’s worldwide production stood at a little less than 3m.PS: That other German wedding, that of Opel, looks more and more like a severe case of DOA. Reuters says that a deal is not imminent and that “General Motors and the German government played down hopes on Friday of a quick decision on the sale.” This is so dead, it doesn’t even warrant a separate post on TTAC.
Bertel Schmitt
Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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  • ZoomZoom ZoomZoom on Aug 16, 2009

    Okay, that picture doesn't look like anything risque is going on. It just looks like some dead bodies carelessly stacked up... Here we go again?

  • Andrew van der Stock Andrew van der Stock on Aug 17, 2009

    VW is catering for the US market: Polo - you can't get it at any price, not even the truly pointless Polo sedan. This would be a great sub-compact car. I will most likely buy a Polo GTI in the next few months as it's a bit bigger and way faster than my old Golf III GL. New Beetle - designed in the US for the US market. Sells poorly in most markets. I loved my turbo New Beetle. Jetta - a rather pointless sedan. Outsells the Rabbit 4 to 1 in the USA. Sales are unheard of outside the NA market. Covers the compact sedan market segment. I am surprised they sell the Rabbit in the USA as the New Beetle outsells the Rabbit. I loved my Rabbit. Passat - sells well in the USA, not so well outside the US market. I am not sure it was designed solely for the US market considering its B platform underpinnings. This is a large car in Europe, but barely mid size in the USA. Tiguan - a small CUV recently on sale. I don't know enough about the sales history of this cute ute, but this segment is on fire in pretty much every market as folks abandon the mommy SUVs and soccer mom vans in droves. Tourareg - A CUV that no one asked for. Sells poorly everywhere but the USA. Covers the larger CUV segment. The 2.5 five cylinder engine is sold nearly nowhere else - it's a lumpen torque monster as most US folks like their grunt down low. Australia gets the much faster, much more economical TFSI super AND turbo charged (i.e. twin charged) 1.4 litre engine. Not only does the 1.4 get 15 kW more than the 2.5, it drinks about 2/3rd the fuel under all circumstances. But if you said to the average consumer, here's a 1.4 litre engine, they'd laugh and ask for a real engine whilst not realizing how awesome the 1.4 is. I doubt the US will see this wondrous little engine any time soon. More to the point, VW caters for the US market in little ways you take for granted. Not only do you have cup holders (!), but you have air con that works whilst the sun roof is open, both things that the German engineers apparently fought against (see "Getting the bugs out" for my source on this one). Andrew

  • ToolGuy Once again my home did not catch on fire and my fire extinguisher(s) stayed in the closet, unused. I guess I threw my money away on fire extinguishers.(And by fire extinguishers I mean nuclear missiles.)
  • Carson D The UAW has succeeded in organizing a US VW plant before. There's a reason they don't teach history in the schools any longer. People wouldn't make the same mistakes.
  • B-BodyBuick84 Mitsubishi Pajero Sport of course, a 7 seater, 2.4 turbo-diesel I4 BOF SUV with Super-Select 4WD, centre and rear locking diffs standard of course.
  • Corey Lewis Think how dated this 80s design was by 1995!
  • Tassos Jong-iL Communist America Rises!
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